Cybergold lays off 25% of staff

Published on November 20, 1996.

Cybergold, Berkeley, Calif., a startup company promising to pay people to look at advertising on the Web, last week laid off 9 employees, representing 25% of its staff. Among those laid off were three ad sales execs, one in Chicago and two in New York, and the engineering director.

The service, which boasted big-name marketing industry backers Jay Chiat, Regis McKenna and Peter Sealey, had signed more than 100 trial advertisers including Nissan Motor Corp USA, J.C. Penney Co. and Pacific Bell. It had been scheduled to launch Oct. 28, but the launch has now been pushed back to late in the first quarter of next year.

Cybergold, led by entrepreneurial founder Nat Goldhaber, had aggressively courted advertisers to its concept, under which it would display ad banners to registered computer users, who would then be paid if they looked at a banner and interacted with the Web site or marketing content behind the banner.

During the beta, which involved 3,000 users, Cybergold paid users credits out of its own pocket, either by check or by crediting a digital cash account. A planned ramp-up to 30,000 beta testers never happened.

It's unclear how Cybergold will handle expenses that test advertisers may have incurred to create advertising modules or modify existing advertising for the Cybergold service. But Cybergold said that any money paid by advertisers would be good when the service launches next year.

"Any expenses that they went to to create ads, it's delayed gratification," said Kim Criswell, director of corporate communications.

Most advertisers did not pay upfront to buy space on Cybergold; instead, they were to have paid 50 cents or more for each user that interacted with their ad.

Critics of the service wonder just how good those demographics will be. People who generally have time to surf the Web and look at ads for payment aren't typically the high-income, educated, time-pressed individuals many Web advertisers are seeking.A similar service, Goldmail, from incentive marketing company Maritz, pulled back its launch plans this fall after failing to sign up enough advertisers.